The Neoclassical Synthesis in Crisis

Abstract

This chapter provides an institutionalist analysis and diagnosis of the current crisis of orthodox economics. We shall, first, characterize the predominant opinion in economics — the neoclassical synthesis. Next, we examine the anomalies which are currently vexing orthodox opinion and their sufficiency to provoke a period of crisis and extraordinary science. In the final section, we diagnose the source of the anomalies of the neoclassical synthesis.

Keywords

Economic Crisis Manifold Income Baran Lution

It is, I believe, the fact that most of the fundamental errors currently committed in economic analysis are due to lack of historical experience more often than to any other shortcoming of the economist’s equipment.

J.A. Schumpeter, 1954.

The ultimate test of a set of economic ideas … is whether it illuminates the anxieties of the time.

J.K. Galbraith, 1973.

Reprinted with permission from the International Journal of Social Economics (1979).